ULIPs were sold like hot cakes in the Indian markets till the downturn in the equities markets recently. The insurance companies are allowed to pay a maximum commission of 40 per cent of the first year premium, 7.5 per cent in the second year and 5 per cent thereafter. But after the fall in equity market since the beginning of this year, ULIP sales have gone down drastically. Looking at this scenario, the Insurance Regulatory & Development Authority (IRDA) has finally decided to reduce the commission rates to make the product more affordable and more attractive.
The step taken is very much in interest of the investors, but IRDA realized the same after the sales declined hugely. If the markets were not that choppy, would the IRDA have thought of the interest of the investors? Highly unlikely.
Does the regulator think about investors only when there is a crisis?
November 18th, 2008 at 8:09 pm
ULIP makes a great sence if they are purchased with debt option. ULIP IS NOT ALWAYS EQUAL TO EQUITY EXPOSURE.
November 19th, 2008 at 6:06 pm
‘Better late than never’
I would say that at least our regulator is functional and trying to save us all……
November 19th, 2008 at 7:38 pm
Currently as the ULIP business saw a fall due to bad market condition. IRDA has directed the insurers to sell more of a traditional policies to stabilize the business.
November 19th, 2008 at 7:40 pm
In opinion its the right time to go for Ulips as now the market is down the investment done today would give good returns in future because everybody knows today or tomorrow our economy is going grow for sure.
December 18th, 2008 at 1:22 pm
One thing why IRDA has to take a step now when it is working good for the customers and this will make now increase selling pressure and the customers will be fooled more.
December 18th, 2008 at 2:56 pm
Its a debatable matter….may be the time they decided to cut the commission for the betterment of the customers was the time the bulls were trading bad…and hence many think the major reason behind the same is the market downfall…however its rightly said when markets are down one must invest as the dawn is always followed by dusk…and situation will definitely flip.